Day: July 17, 2022
How to Make the Most of Your Successor Trustee
If you’re like most people, you probably don’t spend a lot of time thinking about how your estate will be distributed after you die. After all, that’s what a will is for as well as the beneficiary designations on your life insurance and retirement accounts. However, if you become incapacitated or unable to manage your financial affairs due to illness or injury before your death, someone has to step in. That person is called the successor trustee. And while it may not be fair that this person has to shoulder such an important responsibility during a difficult time (or at any other time), it’s important for them to know what they’re getting into before taking on the job of managing someone else’s money and belongings for years or even decades afterwards.
Set up a trust.
A trust is a legal document that outlines how you want your assets to be distributed after your death. If you have significant wealth, it’s important to set up a trust because it can help protect that wealth from future taxes and creditors while providing beneficiaries with more flexibility in managing the funds. You could create an irrevocable trust to benefit family members or friends, or an inter vivos trust (living during lifetime) for yourself and other heirs who may need access to the money during their lifetime. The latter allows for changes if circumstances change such as becoming disabled or having medical expenses that make it difficult for them to earn income on their own.
You might also consider setting up a charitable remainder unitrust (CRUT). This is a tax-saving strategy where donors give away appreciated property through an irrevocable CRUT agreement with their financial adviser while retaining an interest in some or all of the income generated by the property until they pass away—at which point everything passes on as planned!
Leave your successor a record of the assets and debts you want to transfer.
The first step to creating a successful successor trustee is to make a list of the assets and debts you want to transfer to your successor. In order for your successor to manage your trust smoothly, it’s important that they have easy access to this list.
Once you’ve made a list of all the assets and debts in your trust, leave it with your successor trustee. This way, when something new comes up during their time as trustee, they’ll know exactly what needs done next. You should also update this list as needed so that any changes are reflected accurately—this helps make sure everything runs smoothly after your death or incapacitation (if applicable).
Let your successor trustee know how you want her or him to handle certain situations that may come up.
To ensure that your successor trustee is prepared for any situation, it’s important to let her or him know in advance what you want done. This can be achieved through a will provision that allows you to specify what should happen when certain types of problems …
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